Facebook has inked a lease for all 432,000 square feet of office space within the bottom two-thirds of the 54-story tower finishing up construction at 181 Fremont Street.

The space can accommodate up to 3,000 workers, many, if not most, of which are likely to be current employees and residents of San Francisco who have been commuting down to Facebook in Menlo Park, such as “a small team from Instagram” which will be the first to make the move and christen the tower in early 2018, according to the San Francisco Business Times.

107 thoughts on “Facebook Leases a Tower in San Francisco”
  1. I had lovely friends visit SF today. I said as we drove past all this — “that thing looks like a cold war era medical device, right?” Reply: “Well, as a girl I can say, it certainly isn’t an attractive silhouette.”

    1. It always reminded me of a smaller, less interesting version of Hong Kong’s Bank of China tower (aka “The Knife”)u

      1. Completely different silhouette thank the HK tower, although since that tower is a Cold War era building, the glass on 181 Fremont is obviously much better.

    2. I assume you were paying it a compliment, since you consistently express in this forum how everything was better back in the Cold War days.

  2. I actually think it is a very attractive building. While Heller Manus almost universally produces generic banality, I think this is a very handsome high rise, much more so than most other dreck on our skyline. Moreover, the proportions and slenderness are nice. This is pretty much the skinniest high rise in the city from bottom to top.

    1. Totally agree; I was near the base a couple days ago, and the building gets more and more striking the closer you get. There are a lot of little details – such as offset (angled?) windows on one façade, that are totally lost in a more distant view. And I think the asymmetric silhouette will be quite welcome on the skyline, after Salesforce and Oceanside are done … a nice counterpoint to the Interstate Bank building (what’s it called now?) north of Market.

  3. Just goes to prove that adding new office space in SF doesn’t always mean new workers needing housing in SF, as Facebook will be instead allowing a lot of its current workers living in SF to not have to commute down the peninsula.

    1. A trend that hopefully continues—and will benefit peninsula commuters as well as locals (assuming we can get those new Muni/Bart cars on the rails asap)…

        1. I think as a practical matter this does mean more housing will be needed in SF. Even if everyone who will work in the building already lives in SF (a pretty big assumption), it makes it much less likely they will leave and move south as they get older and start thinking about moving from apartment/condo to SFH.

          1. I can’t follow your argument. If older people universally “need” single family homes (true single family homes, not row houses ), where would such housing be built? Why would this announcement obviate the choice for many of moving to the mythical suburban cul-de-sac, especially with children?

          2. I didn’t say they “need” SFH, so it is odd that you put it in quotes.

            My logic is simple: if you take the same group of employees and put them in SF, instead of somewhere else, they are more likely to want to live in SF, instead of somewhere else. And if they already live in SF, they are more likely to stay if they also work here.

          3. As they get older and suburban living becomes more appealing, they could move and work in Menlo Park and free up space at 181 Fremont for a young employee who wants to be in SF.

  4. There should be at least 10 more towers like 181 Fremont in this city. Maybe the planners behind Central SoMa plan should realize that their vision of terrible Downtown San Jose wanna-be isn’t wanted by YIMBYs or NIMBYs alike. Tall skinny towers are much better than 200 ft, 1 mile long cubes that will take over SoMa under the Central SoMa plan.

    1. With Prop. M, there will not be 10 more towers of anything. The city is about to hit the hard office space cap under Prop M, aside from the exempted Candlestick Park redevelopment area (exempted under voter-approved Prop. O).

        1. Does it matter? None of that is going to get built for many years. Again, Prop M is in effect (aside from the Candlestick redevelopment area). Central SOMA will take 25 years to get built out, and who knows what the final form will look like when it is all done, or how business needs will have changed.

      1. And is there really going to be the demand for a massive new amount of office space in excess of Prop M limits? If so, voters can revisit the law. But 10 huge new towers of apartments and/or condos downtown would be great.

  5. Where are you getting this info: “which are likely to be current employees and residents of San Francisco who have been commuting down to Facebook in Menlo Park”

    Or are they assumptions in order to make more assumptions about how it wouldn’t affect real estate markets in SF? Companies don’t determine who works where based on where individuals live, but rather segment by teams.

    1. South Bay Tech Companies often let individuals who live in SF work in their SF offices, even though their teams are based in Menlo/MV/Cupertino. What you wrote may be typical of companies in general, but less so in tech.

      1. I’m in tech. Although it may happen — it is not actually too common, at least not full time. My point being is that the statement mentioned above comes with a lot of assumptions based on the editors opinion or bias rather than actual statements or facts from FB themselves (Unless there were remarks made that were otherwise not mentioned here or in the article)

    2. Apple is doing the opposite – moving SF employees from its 2nd Street offices to the donut HQ. It’s not welcome news for those who were used to a very easy commute.

      1. Apple is really going completely against the trend of tech companies branching out to city centers. Here are some possible reasons:

        1) Apple’s insularity is a feature, not a bug. All the mayor parts of the iPhone (hardware, software, design) are controlled by Apple. They require very close collaboration between the different teams to work seamlessly and reliably together. This is why they tend to centralize the entire workforce in one spot. E.g. Google, products are much less integrated (Search, YouTube, Android) so the workforce can be much more scattered.

        2) Apple pays the salaries that allow the people to live in the Cupertinos of the Valley. They have much less support people (e.g. customer success, sales, advertising) on site than Google and Facebook.

    3. Yes it came – implicitly – form the SBT article, which also offered up this gem “(San Francisco) is really a gateway city. That wasn’t the case seven, eight years ago” (from Jay Lituchy, the CIO of the building’s owner).
      So thanks Jay – and facebook: putting SF on the map…finally!!

      1. Same question, where does SBT get this information from? It sounds like there are a lot of assumption about who is going to which office.

        NA is right. I also works in tech. The primary criteria of assigning people to office is to put related teams close together, not by the employee’s residence. If you live in SF but your team are in South Bay, don’t expect to spend five days a week in the SF office.

    4. NA, you are mistaken. Companies in the Bay Area absolutely determine who works where based on residence.

      Since 1998 I have worked for four different tech companies with HQs in the South Bay, which had extensive office space in SF reserved for employees who live in SF. Whenever I consider career moves, it’s a major consideration. I have turned down several good job offers because they involved a South Bay commute.

  6. A look at larger trends here:
    1) After Google’s land grab around the future Diridon station in Downtown San Jose, this is the second major tech company that sees its future workforce in a city center close to public transportation. For local politicians and voters, this is a major call to complete infrastructure projects like Caltrain electrification and Transbay extension, HSR peninsula and BART extension to San Jose.

    2) This is not just a move to SF, but also a move closer to Oakland. Commuting to Menlo Park from Oakland is a nightmare. This tower will be just a 20min BART commute away from the new high rises under construction around 19th Street Oakland and McArthur.

    3) To those seeing the Transbay Center as a failure, this commitment shows how much demand there is for a well connected public transportation hub in downtown SF. Facebook could have leased something around Market street or in Mission Bay, but they opted for the Transbay center due to the prospect of quick public transportation links to the Peninsula and East Bay. The foresight of the city planners should be applauded.

    1. “This is not just a move to SF, but also a move closer to Oakland. Commuting to Menlo Park from Oakland is a nightmare”. Good point. Not just Oakland but further towns close to a Bart station where rents are lower (relatively). This is a way of capturing East bay talent for them.

      1. Ever thought of people cycling or running from Bayview along the Blue Greenway waterfront up SOMA? Sounds like something Techies would pay a premium for.

        1. As those links get better, definitely. But the Blue Greenway is not complete by any means. I do that ride frequently along existing bikeways and it needs a lot of help. The Blue Greenway is an idea, not a reality.

    1. Not really, and you’d be stuck relying on the always-broken-down BART, or have to pay the upcoming $9 Bay Bridge toll everyday coming from Oakland. Takes me about 25 min to bike from Bayview to my office in fidi North of Market, so this Soma location would be even easier.

        1. I took the T Third yesterday for the first time in many moons from Dog Patch to the Ferry Building. Excruciatingly slow. A true transit embarrassment. ANYTHING but walking would be faster.

      1. BART from DTO is 10 min, 6 min from Woak, and ususally the trains run fine, like 90% of the time. So make sure you know what you are talking about please.

      2. “always broken down BART” ….I ride BART everyday. I’d say there is a material delay or stoppage 1% or less of the time.

        1. the 13% off-time performance includes delays, which can be relatively minor. Not total system shutdowns as implied above.

        2. Yes, I don’t know their def of “on-time”, but hopefully it’s not “less than 3 hrs late” or something…but at any rate hardly “always broken down”.

      3. Suckers take BART in the mornings.

        AC transit busses are much better…taking th the O from alameda was one of the best changes I made when I worked in the city.

    2. Ever thought of people cycling or running from Bayview along the Blue Greenway waterfront up SOMA? Sounds like something Techies would pay a premium for.

    3. It is not even close. According Google Map, it takes 21 minutes to get there from Oakland Civic Center. It takes 36 minutes, that is 70% more time, to reach from Bayview Opera house.

    1. An educated guess, there are not 70 stories, but the top floor requires one to push the number 70 on the elevator. Creative numbering so that the top floor dweller can say they live on the 70th floor, and can be charged for that privilege.

    2. It’s pretty standard for towers to inflate the number of floors, a tradition started by Trump tower. All kind of mechanical floors are included and sometimes late atriums are counted as multiple floors.

  7. The numbers being thrown around on this lease aren’t consistent. Does 432000 sf accommodation 3000 people? If so, why does the commercial real estate press reckon that Google has only 1500 employees in SF, when Google leases twice that much space? If the ratio holds then Google has 6000 people in SF, and they are as large as Salesforce. But that doesn’t make any sense either because Salesforce has ~ 2 million sq ft of offices in SF.

    I think maybe 1500-2000 people makes more sense, even with the way Facebook crams drones into offices.

    1. The original article said “b/w 2000 and 3000”, which I agree seems a little tight…particularly the latter as ~250gsf/employee is, I believe, the norm. So we might assume that either they’re planning on sardining people in, or the number(s) got hyped up. Take your pick

  8. This is a bet that SF will attract talent and a bet on the inner East Bay/Oakland will add housing. Tech has tried for nearly a decade to get the valley and peninsula cities to build housing, so now tech is looking elsewhere.

    1. You could make the argument that It is only bet you can make it outside of SF developments along the waterfront – Candlestick, Hunters point, power plant, etc…which in some respects don’t really favor families other than those in the renderings.

    2. All of lower east Oakland is anxiously awaiting gentrification. Let’s do this thing! Get us some Starbucks up in here, stat.

  9. I’m waiting for someone to explain how this move, coupled with Amazon’s announced plan to build its new “second headquarters” somewhere other than the PNW, nonetheless strongly indicates that San Francisco is in decline and Seattle or Portland is where the future lies…

      1. Amazon is not opening a second headquarters in Portland. As a former resident of the region, I’d love to be wrong. But I don’t think I am. It makes no sense to do that even if Portland meets the criteria in a technical sense. And I don’t think anyone who has thought seriously about Amazon’s options thinks Portland is on the short list, either.

        1. Probably not; I was merely pointing out the PNW wasn’t eliminated and it’s wrong to single them out ….anymore than New England or the Upper Midwest or Hawaii or any other regions that likely won’t make it simply b/c they have so few areas meeting the basic population criteria.

          1. Well, you can focus on whatever region you want. I was focused on the PNW because we commonly hear from socketsite comments that Seattle and Portland have displaced SF as the preferred destination for growth-minded companies. If people regularly said that about Hawaii, I might be talking about Hawaii. But they don’t, and I’m not.

            Also, Amazon is not CURRENTLY based in the Upper Midwest or Hawaii. It is based in Seattle, and Seattle is the biggest loser in this whole thing. I’m not happy with that result, but it is reality. I note that is also isn’t the first time time this has happened–recall that Boeing moved its HQ to Chicago ~2001. There are reasons that this keeps happening–some of them are the same reasons I’m here, instead of there, too.

          2. Fair enough.

            But I don’t think I’d call Seattle the “loser” in this …at least if the actual HQ stays there: sure they’ll be missing out on Amazon going from 45K workers>~100K, but is that really a bad thing?? Detroit’s a splendid example of putting all your eggs in the same industry basket, and I would have to think the risks are even worse putting them all in the same company basket. I don’t know about you , but I’d be quite happy if Uber, facebook and any number of others had set up their tents in other fields. And perhaps so would some of those people commuting in from Tracy every day.

            But now – as the Control Voice always likes to say – back to the topic at hand: how a 400k gsf lease signing guarantees SF eternal life.

      2. My guess is the second HQ ends up in Florida or Texas. Those states not only don’t have a state income tax, they have lower business taxes – and are very willing to cut deals with companies relocating there, Beyond that, I’d think Austin has to be near the top of the list. All the tax advantages for workers and company, plus it’s progressive a la Seattle and has a highly educated/skilled labor force.

        1. I would venture to guess that Boston might be on the short list as well. Even though Portland would look like a good candidate, they would be drawing from the same labor pool.

          As far as Denver goes, there was an article from a Denver paper today expressing concerns about the labor availability there as expanding companies in the city is already having problems recruiting enough talent.

          California cities will not be able to offer the same incentives as Texas cities, but they do have a good pool of tech employees. However, SF and the peninsula has too many space restrictions and I don’t see Amazon making a Facebook move.

          1. Portland would be problematic for many reasons. One is it’s too close – the southern end of the greater Seattle/Redmond/Tacoma metro area is a little more than 130 miles from the northern end of the greater Portland metro area. Not much further than SF is to Sacramento. If it were not for the national forests along I5 between the two metros, they would likely eventually merge into one huge metroplex.

            Also, Oregon has a state income tax and higher business taxes. It would make more sense to go to Vancouver than Portland in that sense.

            The Cascade range is dormant but some of the peaks vent from time to time and Helen’s was not all that long ago. Amazon would be unlikely to place both its HQs in this region given the possibility of a major volcanic/seismic event that could disable both centers.

            Agree about California. It is not in the running. The highest income taxes in the country, some of the highest business taxes and the general condition of the state mitigate against Amazon putting their second HQ here.

    1. I also have been awaiting his post spinning how this development demonstrates how business/life-in-general is further deteriorating.

  10. This building is not 70 stories. The top floor is at 670′. That would be less than 10′ floors. It is 56 stories. 181front.com is incorrect on floor numbers if that is the sight you are using. Use heller manus or contact them for verification.

  11. Wonder how many of the residential units will be bought by facebook employees wanting a very short commute. The “company tower” is the new “company town”.

    1. With units priced from the low $3 millions, I doubt many FB employees will live there. It would, however, be the ultimate commute.

  12. Facebook buys its buildings, it doesn’t generally lease them if it intends to stay. They are building a massive complex that includes 1500 housing units right behind its existing space in Menlo Park, which it intends to keep, along with 1,750,000 square feet of office space. It won’t be ready until 2021, so they appear to be doing what Apple did and lease temporary space in SF to handle overflow until the new facility is ready. My understanding is that Apple intends to permanently close its temporary San Francisco space when they occupy their new, larger campus.

    The amount of office space in Facebook’s new Menlo Park campus is 4x what they have now, so they’ll end up with 5X their current capacity in 3 years, which is so far beyond their growth plans that they will likely rent out some of the space to other companies until they can grow into it. They aren’t going to be leasing space in the bay area when they have that one sitting part empty.

    So in all likelihood, this is a stop gap solution to be permanently closed at some point in the future. They are very committed to Menlo Park, as evidenced by the fact that they bought the land and will build what they want, exactly like Apple. In the mean time, it should provide expansion space for people already in SF.

    1. I was wondering about that on the flight back from Portland – the massive FB expansion planned in Menlo Park and whether the 181 lease is a temporary measure until that MP complex opens up. Do we know what the length of the lease is? The article I read didn’t have that info and could only say it’s worth about 34 million/year. Apple is slowly re-locating it’s SF staff out of the city. Google stubbornly refuses to lay down a big footprint in SF. HP/CP could not lure them. Google is building a massive complex in SJ and housing as well.

      Don’t know if this will be permanently closed at some point – I’d guess FB would retain a token SF presence going forward in SF and this would be a good spot.

      1. So they’re taking 40 stories of a brand new tower for their thousands of employees who life in SF…. and we’re calling it a token presence?

        Ok! My property values are delighted at this sort of token presence.

        1. Apple moved in in 2016. How’d that work out for your property values?

          And Dave was pointing out that he thought they’d retain some sort of token presence after they closed this facility, not calling this a token one.

          Finally, there were 5100 fewer people working in SF in June of this year than there were at the start of the year. Even if they fill every available slot in this tower tomorrow, you’ll need a deal like this every two or three months, just to stay even.

          1. No one is spinning this as a negative for SF RE values. What one should note is that most or many of these employees already live in SF per the article. Say 50% live here and 50% don’t. Are the 50% that don’t live here all going to move here? Hardly. Presumably they have homes or rent on the Peninsula and many will stay put.

            So 2000 workers – the 3000 number is off as, at 210 square feet/worker (which is the low end), 430K feet comes to about 2000 workers. The source article got other things wrong also – 70 stories? Really – it’s 54. How they got 70 is anyone’s guess. On the latter point, one of these blocks was significantly underbuilt as to allowable height. By 150 feet or so. It may have been this site or the Park Tower site. Not sure. Another 150 feet would have gotten it close to 70 stories. BTW, the First & Mission site was also underbuilt. Zoned for 60 stories or so, a 30 story tower was built there instead.

            As to the new workers, 1000 of those 2000 live outside the city and, being generous and assuming 25% of them choose to move to the city, that is just 250 people. And that is somewhat canceled out as Apple moves its staff out of SF. So not a negative for SF RE – but not a significant boost either. On the positive side of a wash.

          2. Yeah, tipster was trying to spin it that way. Not effectively, and he relied on stale employment data to boot when recent data demonstrate the precise opposite of what he attempted to argue.

          3. All the workers don’t have to move here.

            This makes a powerful statement about San Francisco’s continuing attractiveness to top talent.

          4. And what “powerful statement” do you make from Apple closing their San Francisco facility?

            The only “powerful” statement I see is that Facebook needs a temporary office to house people who will ultimately work in Menlo Park. They easily have the money to buy buildings anywhere they are going to stay, and they chose to buy in Menlo Park and rent in SF in the interim.

            And no, this is certainly not negative for SF, but it’s hardly going to make a dent in things, both on the way in, nor on the way out when they leave in a couple of years, any more than one should be thinking gloom and doom just because Apple is abandoning the city entirely after their own stint here.

          5. ‘When’ they leave? So that’s an absolute prediction. What’s your timing on that, two years? We shall see!

        2. SF is one of the least affordable if not the least affordable housing markets in the country. Prices up further would aggravate that. Good for you and me as homeowners here, but not good for the city as a whole. Or for my kids and your kids – assuming you want them to be able to live here if they so desire.

          SF is increasingly loosing its diversity and vibrancy because of the housing and rental situation. That is not a good thing.

          1. Which is why we should build more housing.

            Because SF’s position at the center of the tech economy is unlikely to change anytime soon, we desperately need to increase supply.

          2. SF is not the center of the tech economy. That accolade belongs to the SV – Palo Alto, Menlo Park, Santa Clara, Mountain View and so on. SF has benefitted from the spillover from the SV and owes a good part of its tech base to the Valley.

            Let’s see what happens with Kilroy’s Exchange and the Park Tower. The Exchange was originally geared towards life sciences but the bio-tech industry ship has sailed from SF. Then it was tech and, more recently – since there does not seem to be a lot of tech takers – the focus has been shifted to general office uses. UCSF is rumored to be interested, but that would not be tech.

            The Park Tower was hoping to lease en masse the building to “a” tech company. Wanna bet they were courting Facebook. As of July/August the Park Tower had no takers. It opens in a few short months and leases will be signed to be sure – what those companies will be as to office use or tech is TBD.

  13. As for Apple packing it up and leaving SF, they just signed a lease last year for office space in SOMA. Was it just a one Lear lead?? Seems odd if it was or probably the info people have is wrong.

    As for Facebook and their lease at 181, CNBC stated it was a ten year lease at $80 sq Ft. I guess they have money in the bank to break the lease but I believe they are there for the long term. Zuckerberg and his wife do have a vested interest in SF. They own a home here and she works at SF General.

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